Aluminum Producers Want To Cash In On Auto Sector If Demand Rises

Not only steel manufacturers, but even aluminium producers in India are now vying for a larger piece of the auto market pie, what with vehicles getting increasingly lighter and stricter pollution norms.

Hindalco Industries Ltd, the world’s biggest supplier of aluminum to carmakers, may double group sales to US $33 billion in five years as Audi AG (NSU) and other European carmakers swap steel with the lightweight metal.

Speaking to Bloomberg recently, Debnarayan Bhattacharya, managing director of Nalco, had said automobiles were a huge prospective business for his company. The European auto market was also booming, presenting a good market, he said.

It is estimated that carmakers use about 50 million metric tons of steel every year globally, equivalent to the world’s total aluminum capacity. The report pointed out that the trend to use aluminum was started by Audi 20 years ago, and today many automakers including Jaguar are using the alloy.

Automobile sales in India too, till mid-2012, have seen higher than expected growth.

According to the recent data released by the Society of Indian Automobile Manufacturers (SIAM), the cumulative production for April-June 2012 registered a growth of 7.6 percent over April-June 2011, manufacturing 1,700,675 vehicles in June 2012.

While the passenger vehicle segment grew at 9.7 percent during April-June 2012, the overall commercial vehicle segment registered an expansion of just over 6 percent year-on-year.

Two-wheelers’ sales registered a growth of 10.5 percent during April-June 2012 wherein mopeds, motorcycles and scooters grew by 6.6 percent, 6.8 percent and 29 percent, respectively.

According to the forecasts made by the Center for Monitoring Indian Economy (CMIE), overall automobile production would expand by 9.6 percent in 2012-13 wherein commercial vehicle production is expected to clock a healthy growth rate of 8.5 percent.

The report predicts that the medium and heavy commercial vehicle production would grow by 2.4 percent while passenger vehicle production may enhance by 9.7 percent. Multi-utility vehicles are expected to grow faster at 19.7 percent, while two-wheeler production is anticipated to grow by 9.7 percent.

By Sohrab Darabshaw